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Survey: Many Enterprises Lack Digital Transformation Strategy

A new survey of 1,400 enterprise decision-makers shows only half of enterprises have a formal digital transformation strategy.

That’s according to a new CenturyLink/451 Researchsurvey that provides insight into how, why and at what pace organizations are preparing for the digital future.

Frank Tutalo, CenturyLink’s director of corporate communications, tells Channel Partners that enterprises may not fully “appreciate the urgency” of getting underway with their transformation.

“Those companies that take a passive approach are the most likely to find themselves playing catch-up with the competition,” he said. “Furthermore, many enterprises are uncertain about the time required to complete a highly complex digital transformation: 41 percent of companies in the early stages of the process expect to complete their transformation in only one to two years, while an equal number say it will take them three to five years.”

The survey — which polled executives in North America, Europe and Asia Pacific — found that disruption will continue to ramp up over the next three years, with 42 percent of study respondents expecting major disruption as the deployment of new digital technologies continues to play out in their respective fields. This will continue to change the competitive dynamics of their markets in the process.{ad}

“Digital transformation programs are now being viewed as strategic, long-term initiatives and typically receive the support of top-level executives,” said Sheryl Kingstone, 451 Research’s director of customer experience and commerce. “In fact, 60 percent of enterprises are increasing their IT spending levels to achieve the significant benefits of digital transformation.”

According to the survey, executives at organizations globally commonly identify with four key pillars of competitive differentiation to target with internal digital transformation initiatives: improve the level of business agility; better manage business risk; improve operational efficiency; and improve the internal or external customer experience.

When asked to rate their organization’s ability to innovate, 59 percent of those with a formal digital transformation strategy already in place rated their organization as more capable and faster to innovate, with 18 percent feeling their organization was slow to innovate.

The survey found three primary barriers to achieving success: inflexible IT systems and the need for agility; organizational silos and the need to uncouple legacy practices; and risk and security, including the need for assured data custody.

Other significant barriers recognized by respondents were potential failure to secure sensitive data, lack of available funding, capital or budget, and challenges of getting multiple service providers/partners working together.

The survey also confirmed the growing importance of cloud services. On a scale of 1 to 10, 80 percent of respondents ranked cloud’s importance at 7 or above, and 20 percent gave it a 10. Additionally, enterprises with a mature digital transformation strategy ranked the importance of cloud services 15 percent higher than companies in the early stages of a transformation.

Among the critical factors for digital transformation success is choosing the right partner, according to the survey. Forty-nine percent of respondents said their organizations are using or expect to use an IT services (including telco services) partner in support of their digital transformation programs, and just under half use or plan to use a cloud-service provider.

Additionally, 92 percent of companies surveyed stated a willingness to use a third-party transformation partner, which Tutalo said was surprising.{ad}

“This tells us that most organizations now recognize the critical importance of digital transformation as well as the value of outside expertise in helping them navigate a complex process,” he said.

IT services and telecommunications service providers, in particular, are strongly preferred as partners, enabling and accelerating digital transformation programs for 52 percent of companies with a formal strategy, according to the survey.

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